Termination is the leading cause of employment-related legal disputes. It is important that employers know how to correctly carry out a termination of employment and develop a comprehensive policy on termination.
What is termination of employment?
Termination of employment occurs when an employee is fired or laid off by the employer, or when the employee resigns.
What are the different types of terminations in British Columbia?
There are two main types of terminations in BC:
- Termination without cause
- Termination with just cause
What is termination without cause?
BC employers are not required to provide an employee with a reason for their termination. But employers can’t terminate employees based on grounds protected by the Employment Standards Act or the Human Rights Code.
When terminating without cause, if the employee has been employed for at least three consecutive months, they are entitled to termination notice or termination pay in-lieu of notice, or a combination of both.
What is termination with just cause?
Termination with just cause is the most serious form of termination. Employers can terminate with just cause when an employee commits a serious act of wilful misconduct/breach of contract (for instance, stealing, assaulting a co-worker, or committing fraud).
With “just cause” the employer is not required to provide the employee with termination notice but must provide the employee reasons for the termination.
When is an employee considered laid off?
An employee is considered laid off when their work hours are reduced to the point that they are earning less than 50 percent of their regular weekly wages.
You cannot temporarily lay off an employee for more than 13 weeks in any given 20-week period. Layoffs that exceed the maximum permissible duration are considered termination of employment and employees are entitled to notice of termination or pay in-lieu.
What are the requirements for providing written notice when terminating an employee?
Employers can terminate an employee with written notice, termination pay or a combination of both. When providing an employee with written notice, employers must consider that employees must be able to work and earn income throughout the notice period. An employee’s notice period can’t begin if the employee is:
- On vacation
- On leave
- On temporary layoff
- On strike or lockout
- Off work for medical reasons
What is termination pay?
Termination pay is pay that is given in place of a required notice period. For example, if an employer does not want the employee being terminated to work through their notice period, the employer can provide them termination pay instead.
Do I always have to provide termination notice or pay when terminating an employee?
Unless the employee is being terminated with cause or has less than 3 months of service with the company, employers are required to provide termination notice, termination pay, or a combination of the two.
What are the rules for paying out final wages when terminating an employee?
Whenever an employee’s job ends, the employer is responsible for paying out final wages. Final wages are everything the employer owes the employee, which can include overtime, statutory holiday pay and regular wages. Final payment must be paid to the employee:
- Within 48 hours after the date of termination.
- Within six calendar days after the last working day or the date the employee quit, whichever is later
How to calculate termination notice and pay?
The amount of termination notice or pay in-lieu that an employee is eligible for is based on the length of their employment.
- Three months of employment but less than one year = one week of notice and/or pay
- One year of employment but less than three years = two weeks of notice and/or pay
- Three or more years of employment = three weeks of notice and/or pay, plus one week of notice/pay for each additional year of employment to a cap of 8 weeks.
When an employee quits, do they have to give termination notice?
Termination can also take the form of an employee resigning/quitting from their position. In British Columbia, employees are not required to give notice. But employers generally appreciate the additional time to prepare for the employee’s transition out of the company. Typically, when an employee is leaving on good terms, they will provide a few weeks’ notice.
When an employee quits, the employer is not obligated to provide the termination pay that comes with being fired.
Do you need help calculating termination pay correctly?
Our experts can help you develop company policies as well as with any other HR, health and safety, or employment advice you need. See how we have helped other small and medium businesses get their business compliant with provincial legislation. To learn more about how our services can benefit your business, call an expert today at 1 (833) 247-3652.